Commission for Racial Equality Pension and Life Assurance Scheme

It is normal practice, when a Government Department proposes to undertake a contingent liability in excess of £300,000 for which there is no specific statutory authority, for the Minister concerned to present a departmental minute to Parliament giving particulars of the liability created and explaining the circumstances.

I wish to notify Parliament of a contingent liability that the Government have entered into in the form of an indemnity connected to the winding-up of a pension scheme managed by the Equality and Human Rights Commission, an arm’s length body which is sponsored by the Cabinet Office.

The EHRC is the successor body to several anti-discrimination bodies that were dissolved by the Equality Act 2006. One such body was the Commission for Racial Equality, which set up a pension and life assurance scheme—CREPLAS—in 1974.

The winding-up process is now nearly complete. The scheme has surplus assets of c. £7.4 million, and when winding-up is fully completed the trustees will refund the surplus, net of tax, to the Treasury via the EHRC.

The Treasury granted the CREPLAS trustees two lines of protection in the form of (a) post-wind-up indemnity against future claims and (b) the power to purchase private insurance. The Treasury is satisfied that its handling of this unusual case should not set a precedent for other existing or future cases both within Government or for other public sector bodies.

The residual risk borne by EHRC/Treasury under the proposed indemnity has been estimated at under £3 million, and is acceptable to the Treasury. In relation to this, I have today laid before Parliament a departmental minute giving notice of the Department incurring this contingent liability.

The contingent liability will in due course be included in departmental and ALB annual reports and accounts.

[HCWS580]